There’s no denying that Uber is one of the fastest growing app-based companies in the world. For those who are unfamiliar with the app, it allows users to call for a private ride in a black car, SUV, or taxi — a service that is quickly overtaking traditional taxi companies.
Uber has been a continuous headache for legislators, because its nouveau business structure enables the company and its drivers to bypass certain rules that other cab companies cannot, as TechCrunch reports. [tweetable alt=”[email protected] says that @Uber has been accused of breaking transport #law in the #Philippines.” hashtag=””]This is particularly true in the Philippines, where Uber was accused of breaking Filipino transportation law,[/tweetable] according to Tech in Asia.
How is Uber “Breaking the Law”?
Uber isn’t regulated by Land Transportation Franchising and Regulatory Board (LTFRB), which means that their drivers aren’t required to have a permit to operate as a public utility vehicle.
As LTFRB chair Winston Ginez put it, “what [they] are doing is a criminal violation of the Public Service Law.” He believes that in order for Uber to operate as a legitimate business, they must secure a franchise, just like everybody else.
Why Was It Able to Avoid Regulations?
Uber has been able to operate smoothly without regulation because the company states that their relationship is with the driver rather than the customer. They hire the drivers on an individual basis and don’t actually own the vehicles that are used — this is the main reason they’ve been able to sidestep laws everywhere.
Ginez told Interaksyon, an online Philippine news website, that Uber is “providing a system for someone to violate a law.” By that logic, are internet service providers criminals for providing hackers with the means to break the law? The argument’s logic is certainly hazy.
Despite stirring up legislative drama in the Philippines, Uber has also caused its fair share of heat back home in the U.S. as well, as with several other places around the globe. The company has also riled up cab companies, who say it’s unfair that Uber doesn’t have to play by the same licensing and safety rules that they do.
These freedoms enable Uber to offer substantially cheaper rides than most cab companies, which then causes them to lose business — they simply can’t compete with the low prices and total convenience that the Uber app offers.
What’s the bottom line?
There’s no denying that Uber has developed an incredibly clever business model that allows them to provide a low-price, convenient car service that’s accessible for anyone with a smartphone, all while (technically) following the law.
So long as proper safety measures are taken to ensure that the driver and the vehicle are both safe, why should they have to abide by the same regulations as traditional taxi companies? [tweetable alt=”If the prices stay low @Uber’s 8m customers will probably stay with it for the long term.” hashtag=”#apps”]As long as the prices stay low and the service stays fast, Uber’s 8 million customers[/tweetable] (a statistic from DMR) will probably stick with them until the end.
Whether you agree with the company’s tactics or not, you can’t deny Uber’s success — with a value of over $40 Billion, the San-Francisco-based company found a perfect gap in the market and utilized it intelligently, according to the Guardian.
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